Opinion | Bailouts Can Save the Economy from Coronavirus

Under the Republican plan, the bailout program would be managed by the Small Business Administration and the loans would be made by commercial banks. But the S.B.A. is itself small, and banks are not staffed to handle an emergency program. The federal government’s reliance on banks to modify mortgage loans during the last financial crisis ended in disaster. In recent weeks, the banking industry’s struggles to handle a modest increase in mortgage refinancing applications has offered a timely reminder of its limitations. The Federal Reserve is better equipped to manage the process than the S.B.A., but it’s unlikely to be much faster. It has the legal authority to create a lending program, and it could create the money, too. But it would also need to create a new bureaucracy, or else rely on the banks.

Notwithstanding the urgency of action, it is important to draw a distinction between small companies, which are inherently vulnerable to major disruptions, and larger businesses whose vulnerability is partly a product of poor choices, notably the vast sums companies wasted in recent years buying back shares of their own stock to enrich their shareholders.

Boeing, for example, is seeking a $60 billion bailout — which, as it happens, is almost exactly the amount of money the company has distributed to its shareholders since 2013, in the form of $17.4 billion in dividend payments and $43.1 billion spent repurchasing its own shares.

The major airlines spent 96 percent of free cash over the last decade buying back their own stock to drive up share prices, living in the moment with little regard to the future. Among the beneficiaries? Airline executives, who sold about $1.6 billion in shares during that period.

Executives in the air travel business, which includes Boeing, should have been ready for a rainy day even if they could not reasonably have been expected to anticipate the particulars of the coronavirus crisis. This is, after all, the third time in 20 years that the industry has faced a debilitating surprise. Accordingly, the responsible course for the government is not just to provide another bailout, but to require changes in behavior.

The Fed already is backstopping short-term corporate borrowing, and it may need to provide similar backing for long-term corporate debt. The Republican plan would provide for an additional $208 billion in loan guarantees — including $58 billion for passenger and cargo airlines — for companies unable to tap capital markets even with the Fed’s assistance.

Businesses would pay interest, and the legislation allows the Treasury to take an equity stake in the companies it saves, so taxpayers benefit from the recovery. It also imposes temporary limits on executive compensation. But that’s not good enough. Big companies, too, must maintain payrolls and wages. And they must eschew stock buybacks.